Baman is a highly innovative and competitive food supply organization based in China. Started in 2014 by Zhang, the entity currently exhibits over sixty outlets in the nation’s northern section of Hunan province. Accordingly, Baman specializes in providing a typical Chinese dish with significant fondness. The product is beef rice noodles, which flow to the customers through three distinct channels: restaurant sit-ins, takeaways, and pre-packaged meals for home preparation and consumption. Zhang’s business idea is substantially new in China, making the product innovative instead of formal. Equally, the investor adopts significantly new distribution tactics that rely on the Internet and other dynamic platforms. Baman operates as a ground-breaking organization with pioneering merchandise, thus requiring a highly crafted stock chain. Therefore, the following discussion analyzes Baman’s restaurant and retail supply chains based on the segmentation, uncertainty, and product demand and supply viewpoints.
Segmentation
Supply chain management refers to the proper administration of products’ movement between the suppliers and the end consumers for optimal profitability and customer satisfaction. Supply chain segmentation is one of the crucial strategies adopted by organizations to promote patrons’ satisfaction and business profitability through lean operations. The strategy (segmentation) works by focusing on commercially viable items in specific regions that exhibit higher demand and supply for the offered items. Baman utilizes the segmentation approach to reach Chinese areas whose culture recognizes the value of beef rice noodles. The matter forces the organization to mainly operate within the Beijing and Tianjin regions, where the food is culture-supported.
Moreover, Zhang uses online marketing platforms to expand the product’s demand across China, with the firm using established e-commerce stores such as Alibaba and Tmall to make sales. The segmentation approach informs Zhang’s maintenance that Baman will only establish physical outlets without its original location after creating over sixty outlets within the Beijing and Tianjin locality. The investor’s argument is significantly informed based on the understanding that offering a commercial product in areas where the culture does not support it leads to significant failure (Katsikouli et al., 2021). Furthermore, Baman’s current concentration within Hunan province comes from the business’s already established supply chain systems within the area. Consequently, Zhang knows that rushing to initiate sites outside the region attracts additional challenges that may hinder or disrupt the business’s receipt of necessary supplies.
Uncertainty
The food industry generally offers formal products with functional demand and stable supply traits. People usually eat food for nourishment and survival, making the sector essential and stable (Guiné et al., 2020). However, differentiation and technology utilization to create a unique business, formulations, and products shift food-based organizations and their items toward innovative demand and evolving supply traits (Arenas-Jal et al., 2020). Subsequently, Baman’s reliance on the internet and highly crafted formulations expose the entity to immeasurable supply chain uncertainties. For example, opting to utilize e-commerce sites to sell pre-packaged beef rice noodles when the product’s actual demand is unknown makes it hard for Baman to realize stable demand. Moreover, Zhang’s maintenance that his suppliers adopt highly innovative technologies and methodologies introduces uncertainty in the supply domain. The organization often suffers supply contract breaches as partners fail to meet the set high innovativeness, making the supply vulnerable to breakdown.
Product Demand and Supply
Baman’s products are meaningfully new in the Chinese market based on the organization’s youngness and undeveloped systems. The company started in 2014 and operates based on Zhang’s theoretical knowledge. Accordingly, making brilliant decisions, such as choosing a culture-backed food product, adopting technology-based operations, and establishing working collaborations with partners, makes Baman appear successful. However, looking at the entity’s supply chain effectiveness based on the demand and supply viewpoints depicts significant issues worth addressing. The entity relies on the Hunan province’s purchases to measure its demand, which never clearly illustrates the national demand for beef rice noodles. The outcome of such a mistake is the resultant excess inventories reported in 2017, jeopardizing the firm’s ability to control capital utilization (Zhao et al., 2020). Still, Baman struggles with selecting and maintaining functional connections with upstream and downstream collaborators due to setting almost impractical strategies highly affected by market changes. The business must move with moderation and only make a step ahead after ascertaining the previous ones are sustainable and fully functional to realize supply chain stability.
Tables for Retail and Restaurant Lines
Baman’s retail and restaurant lines exhibit significantly varied supply chain strategies. The eateries offer innovative products with responsive strategy, whereas retails are functional and have an efficient plan. The following tables show their various but corresponding supply chain elements:
Table 1: Demand Characteristics
Retail
Restaurant
Low demand uncertainties
High demand uncertainties
Significantly predictable demand
Moderately difficult to forecast
Reduced inventory cost
High inventory cost
Stumpy profit margins
High-profit margins
Low stock-out cost
High stock-out cost
Low obsolescence
Moderate obsolescence
Table 2: Supply Characteristics
Retail
Restaurant
Fewer breakdowns
Vulnerable to breakdowns
Stable and moderately high yields
Variable and lower yields
Less quality glitches
Potential quality problems
More supply bases
Limited supply sources
Less process alterations
More process changes
Laid-back to changeover
Difficult to changeover
Steadfast lead time
Variable lead time
Table 3: Uncertainty Framework
Restaurant
Retail
Innovative products: High demand uncertainty
Functional products: Low demand uncertainty
Evolving processes: High supply uncertainty
Stable processes: Low supply uncertainty
Table 4: Uncertainty Reduction Strategies
Retail
Restaurants
Maintain information sharing
Improve information sharing
Preserve stakeholder coordination
Adopt tight stakeholder coordination
Preserve synchronized planning across the supply chain
Adopt synchronized planning across the supply chain
Table 5: Matched Strategies
Retail
Restaurants
Efficient Supply Chain
Responsive Supply Chain
Scale economies realization
Internet reliability for faster information sharing
The US apparel industry is extremely lucrative. The industry is worth more than one hundred billion dollars. The profitability of the industry has attracted tens of thousands of shopping malls that specialize in selling various types of attire. Women clothing stores have a lion’s share of the market. The size of shopping malls ranges from small boutiques to large stores, whose operations span various states. Nordstrom is one of the largest apparel retail stores in the US. Nordstrom’s popularity rises from the fact that it offers high quality clothing to its customers, and strives to meet the specific needs of its customers.
The retail clothing industry faces great uncertainties due to the economic situation in the US and Europe. Economic uncertainties increase volatility of prices and create significant shortage of labor. Economic situation in Europe increases the threat of another recession, which would significantly affect the industry. In addition, there is a steady increase in cost of production from China – one of the major outsourcing locations of clothing companies. This increases the risk of China exporting inflation to its trading partners (Lardy, 2011). Since China is one of the major US trading partners, Chinese inflation would greatly affect the US. Therefore, Nordstrom must create a strategy that would provide it with options that will enable it to overcome economic uncertainties. The company should choose its suppliers carefully, to reduce risks due to the economic uncertainties. Proper sourcing would cushion the company from volatility of prices and guarantee steady supply of products.
Nordstrom strives to offer its customers high quality products at very competitive prices. Since importation forms a sizeable percentage of the company’s products, the price of the products is dependent on the strength of the currency. Economic uncertainties in have the potential of leading to weaknesses of the currency. This would affect the price of products at Nordstrom retail outlets, and ultimately the profitability of the company. This necessitates Nordstrom to look for alternative suppliers, whose currency is more stable. In addition, Nordstrom should streamline its supply chain to facilitate fast response in case of any changes that may adversely affect the company.
Tastes and preferences of customers are the major factor that shapes the industry. Change in fashion affects the clothing retail industry significantly. Change in fashion may lead to a significant change in demand in clothing and related products. This necessitates clothing retail stores to have proper inventory mechanisms, which would cushion them from changes in fashion (Stickney et al, 2009). Therefore, Nordstrom should have efficient inventory practices that would cushion them from risks due to changes in fashion.
The US economy has not yet fully recovered from the recession. Unemployment is still very high. Unemployment reduces people’s purchasing power. Therefore, this would result in reduced sales for apparel. In addition, less people are willing to spend huge sums of money on designer clothes, which form a sizeable percentage of sales in the apparel retail industry. Nordstrom can overcome this problem by choosing a suitable collection of clothes. The company should ensure that its products are not highly priced. This would help in maintaining existing customers who would like to cut spending attire. However, Nordstrom should ensure that the price of their products is not too low that it may compromise the customers’ perception of quality.
Having a proper strategy would enable Nordstrom overcome some of the problems of economic uncertainties. The company should improve its operations to cope with the problems. This would enable Nordstrom emerge as a more competitive player in the industry after the US and global economy stabilizes.
References
Lardy, N.R. (2011). Sustaining China’s economic growth after the global financial crisis. Washington, DC: Peterson Institute.
Stickney, C.P., Weil, R.L., Schipper, K. Francis, J. (2009). Financial accounting: An introduction to concepts, methods, and uses. Belmont, CA: Cengage Learning.
Headquartered in Little Rock Arkansas, Dillard is a retailing departmental store that offers men, women and children clothing. In addition, the retail store offers accessories, home furnishings, shoes and cosmetics besides numerous consumer products. In the first quarter of 2012, Dillard operated 287 locations with 304 retail stores including online retail store Dillards.com and 17 approval centers across 29 US States. From the first quarter of the fiscal year 2012/2013, the departmental store recorded a net income of over $463.9 million and net sales of $6.26 billion. Currently the retail store boasts of 38,900 employees in all its retail stores.
Application of chaos theory in management
To continue driving its efficiency in retail operations and deal with some of the most important current causes of revenue loss to most retailers, appropriate management strategy must be put in place. Like most retailers in the industry, adaptation is imperative as competition increases and economy continues to shrink (Bazerman & Moore, 2008). The contracting economy has caused tremendous changes in consumer purchasing patterns including wants based on essential spending. Besides, consumers have been continuously redefining their priorities and purchasing patterns cautiously by moving towards logic based purchasing (Smith, 2001).
Therefore, retail chain enterprises such as Dillard have been left with no option but to come up with management strategies that will handle the current situation (Levy 1994). Dillard has adopted cost management and customer retention strategies. The retail store is under great demands to find out and take advantage of opportunities that would augment customer satisfaction, minimize costs, generate new sources of aggressive differentiation and improve on productivity (Bazerman & Moore, 2008).
The retail store cost management strategy has been directed towards increased inventory management. The retail has to improve its management in retail floor inventory without losing any existing or prospective customer. To achieve this, the retail store has invested in the most fundamental levels of operations including technology and engineering processes (Bazerman & Moore, 2008). However, these processes must be consistent with the retail store core supportive strategic schemes which include enhancing customer experience, maximizing revenue and reducing costs.
Application of SWOT
SWOT analysis is a key marketing component that scrutinizes the retail store internal and external relationships, products, essential processes and business composition. But most importantly, it provides a reviewed scrutiny for its vital income areas and stratagem (Smith, 2001). For instance the retail store key strengths are the customer relations capability and abundant knowledge in the retail business area while the major threat facing the company is competition. The stores opportunities are abundance in the e-retailing while its major weakness is coping up with economic downturn.
Dillard’s core components and processes
Dillard is committed to providing customer value that includes quality, reduced price efficiency and fashion. Besides, the retail store is aggressively expanding in non-traditional malls where customers conveniently get their preferred products. In addition, the efficient management of Dillard has ensured its growth and expansion in new areas. Another core competency is the leadership in direct marketing which is achieved through direct mailing campaigns, efficient data management as well as proper customer relationship management.
Generally Dillard supply chain management quality and control ensure competitive prices and increased quality on products being sold. The store product selection criterion ensures high quality and fashionable products compared to most of the chain stores. Other essential components and processes include knowledge development in the retail stores, quality control, design, advertisement and immediate reaction to the market trends.
Conclusion
Chaotic theory presents a practical hypothetical framework for acknowledging the active development taking place in retail stores and the multifaceted exchanges among actors. Therefore, it can be argued that retail stores are conceptualized as complex dynamic organizations which display both changeable and fundamental order. How chaotic theory is applied in the modern retail supply chain has been clearly illustrated.
References
Bazerman, M. & Moore, D. (2008). Judgment in managerial decision making. New Jersey, NJ: John Wiley & Sons.
Levy, D. (1994). Chaos theory and strategy: theory, application, and managerial implications. Strategic Management Journal, 15(6), 167-178.
Smith, W. (2001). Chaos theory and postmodern organization. International Journal of Organizational Theory and Behavior, 4(1), 159–286.
The COVID pandemic that rapidly spread around the globe had a lasting and considerable impact on my small retail business. To begin, when a wave of lockdown came, I had to shut down my business and send employees home for a period of time. After the strictest measures were lifted, we were able to operate at a maximum amount of four hours per day with the minimum number of staff. We were only able to do curbside pickup and/or 1 person at a time inside our store, which ed t drastic decrease in profits at the same time considerably enhancing clients’ waiting time.
Another problem cause by the lockdown was the disruption of the supply chain due to the lack of supplies and delivery options. Our exclusive vendor had to shutdown, and we could not get his merchandise despite the fact that it was the only brand we sold. After some time, when supplied resumed, our retailer business could function a very slow pace, which resulted in constant delays of our merchandise to the clients.
The COVID-19 pandemic also brought forth health and safety concerns as the company had to make sure that no employees or clients are subject to unwarranted health risks. We had to find ways to prevent clients from handling merchandise on the shelves apart from the items they intended to buy. For this, we hang declarations asking clients to be aware of the health risks and not to take anything they were not willing as to buy. While the measures were effective in preventing COVID-19 contaminations, at the same time they led to the loss of some of our permanent clients who enjoyed handling the goods before making decision on whether to buy them. Gradually, the limitations were lifted; however, in COFID-19 pandemic, our small retail business lost some percentage of its marginality and some of its staunchest clients.
Supplements are a very big factor when working towards health and fitness goals. Supplements allow for the body to recover to its maximum potential. Unfortunately in our everyday foods we do not have the recommend nutrients and vitamins that is required for our bodies to fully recover.
The company has carried out various researches on supplements and have found out the best supplement for the customers.
Our mission at forefront fitness is to provide you quality driven results.
When a customer becomes a member he gets the following:
Starter pack
Monthly newsletter
Other services include
Qualified nutritionist
Qualified massage
Qualified physiotherapist
Brand, Product And Service Offering
Brand: Optimum Nutrition Product: The Gold Standard 100% Whey Protein
Whey Protein Isolates are 90% pure protein by weight. The company will rule out various products into the market and these products will have proteins in them. The products will include golden standard 100% whey protein real grains whose brand name will be universal nutrition, animal cuts, animal stake, shock therapy and many others in the area of nutrition. Because of the current need to reduce obesity in America our products will have less fatty contents to reduce cholesterol and lactose. The measure that will be used in determining the contents of fats and protein in our products shall be the measure available by regulating authorities in USA. Animal foods shall have reduced fat contents while shock therapy will be used in helping people to reduce muscle pulls in the body. However out products will not be available for use to children because of the effects they have on stimulating hormones.
Competitors
The existing well-known e-commerce retailers with such a high market share, especially those who are into electronics business are a high competition for The Company. As these retailers effectively implement niche marketing, use value-based pricing strategy, and move toward upscale discount specialty merchandisers – this is certainly going to put pressure on The Company is to design its strategies and break into the market in such a way so as to achieve its aim of becoming one of the market leaders in web-based sales of retail. Its biggest competitors include:
Amazon.com: Amazon.com is working on redefining its niche from people interested in good value books to the time-challenged consumers who are interested in finding most things at one place with easy service and fair prices. Its plus points are that it communicates and highlights its positive points of difference before and after the sale. However, Amazon.com is currently facing a threat of losing its brand identity by extending it non-stop into new territories.
E-bay: E-bay is the leading online seller of collectibles, autos, and many other products. It has indeed worked through its success by its “location strategy” inside the virtual marketplace, which it pioneered, leading its way to creating a flea market where buyers and sellers could participate in auction-type transactions. The competitive advantage that E-bay holds is in the rapport that it develops and sustains with each of its customer bases. It inspires buyers and sellers to evaluate each other, thus regulating and managing the quality of their sellers and transactions. It stays competitive by continuously growing product lines, and appealing to individuals and large enterprises like IBM, Disney, and Home Depot as sellers and buyers.
Market Segmentation
Corporate Health
The forefront fitness corporate health program is designed to build relationships within the organisations. We have developed various programs that can be tailored to each individual organisation. After trial and error we have designed our programs with a simple approach to cut through the jargon and get ‘straight to business.’
Executive Programs/ceo
After working with many Executive Managers we have found that they are very driven and due to their position they frequently need to make decisions and have deadlines to meet. Because of this we understand that the top 1% within an organisation need to have clarity and vision, therefore our focus is productivity and quality as oppose top quantity which in many cases leads to burnouts.
Seminars
Our seminars run for 45 minutes where the follow topis are covered.
Nutrition
During this seminar the basic fundamentals of nutrition will be covered. Due to working in a vigorous environment the focus will be on boosting performance, as this can be affected without supporting nutrition. A lack of nutrients in the body will take its toll on each and every individual who neglect healthy eating.
The aim is to deliver easy to follow nutritional advice to provide solutions and tips which will guide your team in the right direction.
Our delivery techniques are simple and easy to understand so you will be able to incorporate the information as soon as possible.
Exercise
We acknowledge the facts and that is why we have an exercise seminar.
The facts are that not everyone is going to participate in exercise and healthy eating; however education is a key part in our organization.
Educating corporate employees about exercise will give them a clearer understanding on the importance of health and impact unhealthy living cost physically, mentally and financially. By doing this they will be able to make the choice for themselves.
When we are carrying out exercise seminars, participants will be assisted to learn how to carry out exercise without trying such as taking stairs instead of a lift, walking to the shop instead of driving and many others.
Situational Analysis
E-retailing
It has taken sometime, but internet has emerged as a vehicle for selling products. Federico Marchetti, founder and chief executive of multibrand fashion e-commerce site Yoox , says that web was new but it is not new anymore and it has become a little more matured, it has been a great learning experience in the last eight years of development. There has been dramatic transformation in how brands view online distribution in the last six months, people have faith in it. And believe that it works. It is very important to have a strong service inorder to entice the customer, as you don’t have sales assistant to charm and persuade the customer.
The latest survey done by Nielsen Global Online Survey reveals, that fashion is second only to books when it comes to shopping online. “About 36 percent of Internet users said they had bought clothing, accessories or shoes online in the three months before the survey, a large increase compared with the 20 percent who reported doing so only two years before and the fastest growth in any e-commerce category.”(Horton, 2008).It has been observed that the highest percentage is found in South Korea, where 99 percent of all Internet users mention that they have shopped online. This is followed by Britain, Germany and Japan with 97 percent of users reporting that they have purchased online, the United States reported 94 percent. Most of shopping in fashion shops in Britain, Germany and the United States is done through online.
SWOT Analysis
The industry has the following Strengths and weaknesses, opportunities and weaknesses.
Strengths
Helps in environmental conservation therefore customer confidence high:
Low services costs
Highly experienced management and staff available in the market
Growth by increasing market share through diversification of products that supports sustainable development
Weaknesses
Barriers to expansion due to environmental regulations by governments:
Licensing problems
Highly competitive market
Raising money from banks rather than shareholders.
E-retail has become an important venture because a company invests in diversified products and services, winning consumer confidence and by providing them various products.
Opportunities
Teamwork is necessary for every organization. Although the team work of e-retail is very appreciable, when one enters into e-business, more efforts are required in order to keep the standards high. The teamwork depends upon the people working in the organization and what kind of bond they have formed together. If the organizational culture is dynamic, there are greater chances of success. However, when operating globally, one has to take in consideration the cultural diversity in mind. Something that can be considered as friendly in the culture of United States may be considered as an insult in some Middle Eastern countries. Therefore, if the company plans to operate internationally, it should keep in mind the different type teams within the company, and create an interaction pattern that would not offend anyone, and enhance performance. Environment is also a growing concern in many European countries today, and research is being done in order to make the healthy.
Growth by increasing market share through mergers and acquisitions within the industry.
Develop new brands which link to changing peoples lifestyles.
Incorporate new technologies in reservation to stay ahead of the competition
Threats
Lack of knowledge, Investors unhappy:
Economy – Expensive borrowing
Expansion, Mergers and Acquisitions – could lead to failure
Competition – other major companies entering the market could affect their revenue
Rules and Regulations of different countries
Positioning
The company has already positioned itself as the world’s most renowned web search engine, and for entry into the flourishing e-commerce market, such an extensive experience that The company already has, will provide it with the data and figures to understand the much needed products for customers. The company will position itself as a one-stop internet supplier of high-quality, fair-priced products. It will leverage its competitive advantages to achieve the desired positioning.
The competitive advantage that The Company already has is its strong brand name and its affiliation with whomever uses the internet. Its brand image and wide recognition will be a strong customer-attracting factor, which will cut its advertising costs to a considerable level. Its designed competitive edge will be its easy to use website and exclusive customer service. The easy to use website will substantially boost the sales, as research highlights that sales are frequently lost due to websites being way too complex.
Strategies
The company’s seven marketing mix strategies are:
Information: the right information should be given about the product the quality and features to avoid conflict of forms when the product is delivered. The other information that shold be given is information in relation to pricing, shipping and impact of returns.
Assortment: proper assortment of products that is available by the company shouldl be assorted in terms of prices, purpose, for easier access by the customer when browsing the companys website.
Product: The Company Shop exclusively offers to customers who are interested to buy real products from retailers and in this case they are safe to get original products. In the beginning, The company plans to offer several products e.g. supplements..
Pricing: As for every online retailer, designing a pricing strategy for The company is a tricky job. There will be a very little room for error in this area, as price hunters will go away or shift to the competitor if there is any bit of overpricing. Due to the price-sensitivity of online buyers, The Company plans to do value-added pricing. The extra small benefits and efficient distribution and after-sales services will make the customer feel that they have been charged fairly. In order to offer low prices to customers,
Distribution: The company shop will distribute its products all over the world. By the company having E-retail will benefit from the international market due to accessibility of internet all over the world. Although infrastructure is poor in Africa, there is a believe that it is Emerging market and provide necessary market. Initially the Company will work as an intermediary; it will be following the logistics outsourcing strategy. When a customer will place an order on the website, The Company will send the product description to the retailer and the retailer will send the product to customer. The company also provides an interface in up to 88 languages. If people cannot understand the product description in English, they can have other language options to choose from.
Convenience: the online retailing website should be convenient to the customer to avoid scenarios where the customer is forced to pay twice in other words the hassles of a customers going to traditional store to look for the supplement should be avoided by this E-retailing.
Entertainment: the e-retailing website for the company should be entertaining i.e. when the customer enters into the site he should find entertaining features that will keep him browsing the website.
Evaluation And Control
Evaluations of Alternatives seek to establish the criteria for evaluation, the features that consumers decide are needed or not.
Past experience is an excellent source of internal search. The greater the experience, the more comfortable is the consumer in terms of search. Some customers do not need to carry out external research for them to make a purchasing decision. They will rely on past experience.. Many consumers’ decision is a combination of past experience (internal sources), marketing, and non-commercial information (external sources). These are important points which internet-based marketers must be mindful of while propagating their products online. In most cases it has been found that while a direct reference to such needs are not met, online marketers do make comparisons of competitor’s product and pricing for customers to make an on-the-spot evaluation, before making their purchase.
When there is risk factor lurking around, consumers are likely to engage themselves in complex information search and evaluation; in low-risk situations, they employ simple search and evaluation tactics.
References
Calver, S & Teare, R 1995, ‘Marketing strategies – hospitality’, in Witt, S & Moutinho (eds), Tourism Marketing and Management (2nd student edition), Prentice Hall, London, pp. 437-450.
Greenstein M & Feinman T. M, 2000, Electronic Commerce: Security, Risk Management and Control, McGraw-Hill Publishing Company Limited, London.
Krafft, Manfred and Mantrala, Murali K. Retailing in the 21st Century: Current and Future Trends, Springer Publication, 2006, XI, 413 p. 79
Kotler, P., Bowen, J. & Makens, J. (2006). Marketing for Hospitality and Tourism, Prentice Hall: Upper Saddle River (N.J), Fourth Edition.
Levitt, T 1986, ‘Marketing intangible products and product intangibles’, Chapter 5 in The Marketing Imagination, The Free Press, New York, pp. 94-110.
O’Brien, J. (2003). Management Information Systems (6th Ed), The McGraw-Hill Companies
Patterson, L. (2008): Marketing Metrics in Action- Creating a Performance-Driven Marketing Organization. Racom Communications
Reynolds J, 1997, The Internet as a Strategic Resource: Evidence from the European Retail Sector, in: L Willcocks, D Feeny and G Islei, Eds, Managing IT as a Strategic Resource, McGraw-Hill, New York.
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Schifmann L. G, and Kanuk L. L, 2000, Consumer Behavior, Chapter 16, Page 437-443, Prentice Hall.
Thomson, C. and Rampton, L. (2006): Putting Your Customers First, Market Research. Melbourne press, New York.
Valdero Corporation, Monday, 2002, Valdero’s Intelligent Supply Chain Control Selected by Extreme Networks, Web.
The global economy slowed down in the year 2011 in a number of leading economies in the world. The Euro crisis that hit the continent brought about negative effects in the financial market. As a result, most of the countries considered tightening their tax regimes in order to raise adequate taxes to run the huge economy thereby threatening the consumers’ confidence (Deloitte 2013). The retail industry has experienced mixed performance across different economies. Australia and Singapore are examples of such economies with wide retail industries.
The retail environment in Australia has been a miserable one for a long time. During the period of 2010 and 2011 alone, the retail real per capita declined to leave the economy in a mess (Deloitte 2013). Australia’s growth in retail sales has been slow in the preceding years; this slow growth rate is attributed to both the cyclical factors and changes in consumer buying habits. Consumers tend to spend a smaller share of their income on retail goods because, in the past, there had been a tendency among consumers to save more and spend the greater share of their expenditure on services like rent, finance and education (Productivity Commission 2011).
On the other hand, Singapore has experienced a strong rate growth in terms of retail sales, with a nominal growth averaging 5.6 per cent in the period between 2004 and 2011. This is in line with the decline in consumer sentiments of 2009 as a result of the global financial crisis which contracted retail sales by 1.7 per cent. However, strong growth in retail sales was experienced in the year 2010 with a growth 6.8%. Currently, the nominal retail sales growth stands at around 6.1 as per the year 2011 (Holland 2012).
It is important to note that productivity levels of the retail industry in both Australia and Singapore have been growing at slow rate compared to other countries in the pacific. Labor productivity estimates, as indicated in the statistical yearbook, 2011 demonstrates a sudden decline in the Singapore’s wholesale and retail productivity. This represents a decline of about 5percent during the given year (Productivity Commission 2011& Lee 2012). However, over the past two decades, the growth rate of productivity in retail has been similar to the average rate for nearly all Australian industries (Productivity Commission 2011). Therefore, in order to achieve productivity growth, the retailers have devised a method of increasing the capital intensity of their operations and adoption of information and communication technology (Productivity Commission 2011).
Sales in different stores in Australia have not been well, this was evident especially in the past few years. Clothing retailers have seen an improvement in the retail sales. However, there has been a welcome rise in the sales of household goods; this was propelled by the low interest rates. Food retailers, on the other hand, have maintained solid sales growth over the years (Deloitte 2013). Divergences in retail condition have also been witnessed across the Australian states, with the retail conditions stronger in the mining jurisdiction. On the other hand, Singapore is heavily dependent on food imports; this is due to its limited agricultural output. More than 90% of the Singaporean food supplies are from overseas. The numbers of total imports, as well as the numbers of supply sources, are expected to continue in an upward trend in the near future. With the introduction of the food diversification program, it is expected that Singapore’s reliance on a narrow group source of food will reduce (Kong 2010).
Online shopping system has gained momentum in the Australian economy. In fact, according to the statistical estimates, the domestic online share of total retail sales in Australia ranges between 3 and 7 percent (Productivity Commission 2011). The online retail sales across the boarders account for around a third of the total online sales, this implies that 2 percent of these sales go to the websites across the boarders (Productivity Commission 2011). In the year 2010 alone, online retail sales contributed roughly 6 percent to Australia’s total spending. By comparison, market analysts estimate the online share of retail sales in Singapore at 4.4 in the year 2011. The Australian online sales are projected to grow by about 15 percent by the year 2014; this is stimulated by the use of new electronic devices like phones with the internet capability (Productivity Commission 2011).
In comparison, online access to retail sales in Australia seems to be greater in the service sector than in the manufacturing sectors. Food retailing is the only sector within the retail industry that is least likely to be in the international online competition (Productivity Commission 2011). Unlike Australia, the recent Singapore’s development in the airline industry has earned it a worldwide recognition. This is simply because of their affordable tickets, enabling it compete in the global market, hence offering different opportunity to travel abroad. This is also attributable to the constant revaluation of its dollar against the major trading currencies, thereby making economic sense while shopping abroad (Price Waterhouse Coopers 2004).
In terms of retail channels, Singapore’s local retail sector is well developed, comprising of a wide range of retail outlets, that is, the hypermarkets, supermarkets as well as small specialist stores and chains. Singapore usually attracts international tourists as well as the domestic tourists who enjoy doing their shopping in the country, this is due to the high number of retailers in the country (Price Waterhouse Coopers 2004). In Australia, the retail pattern has changed to a multi-prolonged approach that embraces both the channels. However, it serves as a link between the customers and retailer’s brand (Deloitte 2013).
It is evident that, price differences across different retailers and retailer-types vary in every economy, this is usually attributable to drivers such as, rents and occupancy costs, wages and labor costs, both wholesale and distribution costs and government taxes and profit margins. International effects may include changes in the exchange rate, as well as the regional pricing strategies. In Singapore, the traditional retail stores are the dominant in the Singapore’s retail food sector, trade sources point out that traditional retails constitute about 70% of the country’s food retail scene (Productivity Commission 2011& Kong 2010).
In conclusion, it is clear that, in both economies, retail industry is a significant contributor to the GDP, with the Australia’s retail contributing about 4.1 percent of the GDP and about 10.7 percent of employment. Singapore’s retail industry, on the other hand, expanded at a faster pace at a rate of 5.6 percent, this is because of expansion in both the wholesale and retail segments.
References
Deloitte, 2013. Global Powers of Retailing 2013: Retail Beyond. Web.
Kong, B 2010, Singapore Retail Food Sector Report, Global Agricultural Information Network. Report no SN0002. Web.
Lee, B L 2012, “Productivity performance of Singapore’s Retail Sector: A two-stage non-parametric approach”, Economic Analysis and Policy. Web.
The scenario describes how management harms employee job satisfaction. Managers use traditional approaches to the distribution of tasks in the company. New hires require managers to allocate better tasks based on their skills and abilities (Antonakis & Day, 2018). There is a constant decline in productivity in the firm, as most jobs are handled manually by managers in a stressful manner. The organization of operational activities is contrary to the managerial approach and employee feedback.
Management Approaches
Management is a necessary part of any organization, as it is aimed at achieving group goals. Four general functions of management are planning, organizing, leading, and controlling (Mintzberg, 1973). Using effective managerial practices increases productivity in the company, reduces resource costs, and speeds up internal work processes. That is to say, to arrive at a comprehensive picture of the management situation, managers need to take into account the context of a task, the demands of the management role, and the personalities of those who are involved. The next step for leaders is to incorporate these considerations into a solution that will function most effectively within the given context (Lamond, 2004). The assumption behind the contingency approach to management is that there is no single, correct response to many questions. It is because organizations, people, and situations are all dynamic and change over time.
The problem for the SNHU Pet Supply Company is micromanagement, overuse, and excessive reporting. This costly approach reduces loyalty, trust, and employee motivation and wastes too much time (Allcorn, 2022). Company managers need to learn how to create a different work environment based on delegation and the involvement of all team members in the work they can do (Allcorn, 2022). This will increase motivation and allow to development of the competencies of employees to identify future leaders.
Recommendations
It is essential for management to approach problems with a strategic mindset to encourage flexibility and creativity. It is related to a leader’s concern for subordinates’ development and interests (Lamond, 2004). The leader listens to employees’ needs, gives them exciting work, and delegates authority to build their skills and self-confidence. The company can use a matrix organization – the division of employees into functional groups and teams involved in a specific project or task (Allcorn, 2022). This will involve employees in all the company’s work processes, allowing them to get a shared vision of the organization.
Managers should allow employees to view contributions to ensure motivation. It thus creates an optimistic, achievable future vision, raises expectations, and communicates the organization’s mission (Bishop, 2015). Aggressive rational task distribution should be based on employee skills that can boost job satisfaction and productivity (Ball, 2016). Consequently, addressing issues that should be a continuous process ensures the well-being of employees, efficiency, and productivity enhancement within the workplace context.
Conclusion
Organization management is one of the essential components of business and group work, allowing different people to achieve a common goal at the lowest cost. It is difficult to overestimate the impact of effective management, which cannot only organize work but also significantly increase efficiency, manageability, motivation, and productivity. All managerial techniques have their place and application, but they should not be abused and rely on only one type of management. Excessive control and micromanagement, useful in stressful situations, reduce the team’s motivation in the long run. Managers need to be more agile, involve employees in decision-making, and inspire them to develop themselves.
References
Allcorn, S. (2022). Micromanagement in the Workplace. Organisational and Social Dynamics, 22(1), 83-98.
Antonakis, J., & Day, D. V. (2018). Leadership: Past, present, and future. Sage Publications, Inc. Web.
Managing employees in the retail business take time and resources. By nature business, retail has its own challenges as compared to other normal offices. One can save himself and his business a lot of trouble and effort by having clear policies on issues relating to the management. What should employees do to be properly articulated? This can be in relation to the security of the business, operations within the business, delegation, teamwork, disciplinary actions, remuneration, and promotions.
Operations
Retail, like many businesses, requires proper rules on operations. The rules should include conduct. The conduct of employees is very important as it portrays the image of the business. The manager should be able to discourage antisocial behaviors like persistent rudeness and lewdness. The manager should encourage all employees to maintain a high standard of cleanliness and smartness. The importance of cleanliness should explain to all employees. The expected code of dressing that is appropriate to the retail business-working environments should be detailed and non –discriminatory.
The retail business manager should also detail a policy on theft, fraud, violence, and the possession or use of drugs in the working environment. The policy should clear on the actions that should take in case of violating them.
Another issue in the area of operations that needs to be articulated is the use of retail business assets. The manager should be able to come up with policies on how the phone facility is made use of. Try as much as possible to discourage or limit personal calls policy on receiving personal phone calls. This will be possible if designated employees manage phone facilities in the retail business. Other assets like the use of computers in the office should also be limited to retail-related activities, in case of things like delivery van and other assets that can be misused. Employees should also de discouraged from using their private cars for office purposes, especially when delivering or going to meet customers. In case there is a policy in place for such a somewhat arrange, there should be compensation that is not arbitrary. Encourage all use of assets, either business or personal, to prior arranged.
On issues of lateness, absenteeism, leaves, holidays, and other related issues that consume retail business time should be discouraged. The decision should be made on how leave dates are to be allocated among the employees, how to treat lateness, absenteeism. If you keep standardized working hours, make it plain that persistent lateness is a disciplinary issue. Do not stipulate that employees must let you know if they are going to be late and must report to their managers on arrival. Make it clear that employees need permission to take any unpaid leave.
To sum up issues of operation, I quote an article from the Retail merchants association (2007); “One of the primary skills for any worker is communication. Whether you are managing a team of accountants, working directly with customers, or supervising in a factory, it is essential from the top of the ladder to the bottom. However, many people today do not communicate effectively on the job – including managers. Many employers assume that workers should come to them for direction or instructions rather than being proactive and approaching their employees. However, the truth is that employers and supervisors who make the extra effort to communicate with each of their employees will come out ahead. Here are five vital communication tips you can use in your workplace today.
Offer clear guidance from the get-go. One of the most important communication tools between employers and employees is the job description. Make sure, whenever you hire new employees, that their job description is clear, accurate, and goals-driven. Making sure your employees are equipped with proper directions in the form of a clear job description will ensure they get to the right destination of achieving their goals.
Assume people will not ask for help. As a manager, employer, or supervisor, one of your key responsibilities is the success of those who report to you. However, you cannot force people to come to you for help. You can only control your effort in communicating. If you see an employee struggling to figure something out, be proactive and offer help. As the manager, you will be held accountable for their performance – whether by your boss, your customers, or your market share. Take the time to offer your assistance to employees, and you will see it is worth the effort.
Conduct regular performance reviews. Performance reviews are a vital communication tool for any employer. Though it is a formal process, reviews are designed to equip you to address positive and negative aspects of an employee’s performance. It may be difficult to bring up areas where employees need improvement in the regular course of the workday, but a formal review is a perfect time to communicate any areas that need help. They are also a great time to reward top employees for great performance.
Check-in regularly. Set a time for regular updates with each employee beyond the annual review. Experts recommend scheduling a regular meeting ranging from once a week to once a month based on what each employee needs and feels comfortable with. This can be an informal 15-minute conversation in which the employee asks for feedback, advice, or direction. Make sure that this time is all about your employee and not devoted to your own agenda. You can always call a staff meeting to talk about your ideas and projects. Employees need time of their own to communicate with their bosses as a way to establish trust.
Understand generational differences. You may manage people older than you may or younger than you, but chances are, everyone in your workplace is not in the same generation. The four generations currently in the workforce include Traditionalists, Baby Boomers, Generation Xers, and Millennials. Members of each of these generations have different communications preferences, and you may need to tailor your efforts, timing, and approach to suit the specific needs of each generation.
Focusing on communicating with each of your employees is a vital part of ensuring that you are an indispensable part of their success. People who know their boss cares about them because they communicate effectively and regularly will be more productive, loyal, and engaged in their work. “This article sums up the do and don’ts in operation.
Delegation
In order for delegation to succeed, a number of issues should be taken care of since delegation involves authority. There must be trust because it involves your authority, your business, or your career. Through this, your subordinates or employees take actions or speak in the name of the business to create a good communication channel. This will ensure that the person to who the delegation is done is able to give feedback.
The following should be avoided in the retail business when delegating.
1. Dispersing your workload just to get it off your plate can send negative messages.
2. Avoid delegating over the phone or by Email
3) Don’t mess with due dates and/or priorities you establish with the person to whom you are delegating.
4. Don’t delegate to issues like discount decision-making, change of prices and sell of goods and on credit. This should be to
Security
Have at least two employees open and close the business. Do not allow all access to the business premises at will. Personal information should be kept out of strangers and the majority of employees. The handling of key assets like cash should be the responsibility of designated employees, and different people apart from collecting should dispense its use. Vary times, routes of travel for bank deposits, and keep a low balance in the cash register.
Recruitment, selection, promotion and retention
Retail business employees many people but have with a high turnover because of their nature. Managers should have policies for recruitment, selection, and promotion that are not discriminating. This will assist in avoiding high costs on induction and health and safety training. The policy should be non-discriminatory; however, when recruiting, look at the age factor.
References
Bass, B & Arolio, B (1994), Improving organizational effectiveness through transformational.
The retail market can be defined as that business that reduces the bulk of a commodity for the final sale to the consumer. Retail companies buy goods in bulk from suppliers and they finally sell these to the customer (Levy & Weitz, 2008).
Because the retail market is near the final consumer, retailers must formulate appropriate strategies to attract and retain customers who will in consequence enable the business to gain competitive advantages.
Retailers may be independent businesses or franchises of other large international organisations that are given rights to sell a given product to the final consumer. The main operations performed by most of the retailers are those of buying the products, branding, resell, grading and advertisement.
In the fashion market, the retailers may opt to buy materials and fabric or be involved in the actual production of the clothing design and manufacture (Lusch, Dunne & Carver, 2011). In other cases, the retailers may opt to concentrate on supplying goods to the consumer and contracting the manufacturing works.
In this case, the retailer can be viewed as an intermediary between the manufacturer and the customer. For H&M, most of their fabrics are made by suppliers in China and turkey.
For successful retailing operations, proper distribution channels must be established and the supplier link must be optimised to ensure that they supply products on time (Datamonitor, 2008).
In this paper, two clothing companies that operate in UK and internationally were evaluated. These are; H&M and Top shop. The two businesses deal with retail market and sell to the final clothing to the final consumer.
Company/ Retailer Brief
H&M
The H&M Company is one of the successful clothing retail companies in the UK and internationally. The company is a market leader in the clothing retail business. It is one of the most successful in the fast fashion industry and the main products sold are those that are currently in fashion. The headquarters are in Sweden.
H&M has more than 1500 stores internationally and it operates mostly in the UK, Europe, North America and Asia (H&M Company, 2013). The company main business is that of designer cloths. The company offers competitive prices making their products affordable to the most of the customers.
H&M retailers operate with different brand names such as Stella Mc Cartney, Karl Lagerfeld and Roberto Cavalli (Kroll, 2004).
The principal success of the H&M retail business can be attributed to the use of modern well situated retail outlets where their products can be bought by the final consumer (Kunz, 1998).
The company maximises on the internet advertisements, use of catalogues and well arranged outlets for them to market their products effectively. H&M ensures that the product mix is well formulated such that product quality, price and advertising are appropriately designed so as to attract and retain the customers.
As it is common in most retail markets, H&M faces severe competitions from other retailers in the fashion industry. In contrast to top-shop, H&M focuses on the distributions of quality products at affordable prices (H&M, 2000).
Top Shop
Top shop is another fashion retail company that has stores internationally. Unlike H&M which deals with garments for males, females and kids, top shop mostly specializes with ladies wear.
However, the company has another stores referred to as top man but the core business of the company still remains the supply of ladies wear. This company offers stiff competition to H&M Company as well as other fashion companies such as Zara.
The company operates in over 100 countries and has established itself as a brand in the retail sales as they bring originality and style to the fashion industry (Top Shop Company, 2013).
The company is struggling to maintain its position at the British high street market and is continually expanding to other areas in the UK and the world. This is in line with the retail theory that details the need for company to move their services closer to consumers to improve the distribution channel.
The company main target is the young women who have a passion for new outfits in the market. The products sold by Top shop differs from those offered by H&M in that, while H&M focuses on the new fashionable designs, Top shop focuses on the indie fashion goals. This makes Top shop develop peculiar clothes.
The development of new products can be seen as a way of attracting new customer’s especially the young to buy the fashion outfits that have been developed. In terms of innovativeness, Tops shop has better innovative products as opposed to H&M.
Store Format
H&M Company has well designed stores all internationally. The company has opened many stores in the UK as well as other parts of the world.
In the United Kingdom, the company has numerous stores located in the UK and the main purpose of these is to take the latest fashion clothing closer to the consumer. The numerous stores enable the company to reach its target market with ease (H&M, 2000).
H&M believes that the store is the market place and is the contact point between the company and the customer. The company invest in designing state of the art stores. The guidelines for these stores are formulated at the H&M headquarter and the company ensures that these regional stores take the same format.
It also makes it easy for the customers to access clothes easily without the need to travel. H&M also allows for online shopping where customers can preview products, make orders and the products can be supplied to them (H&M Company, 2013).
Before the internet era, H&M used catalogues that enabled the customers to shop from home. However, with the advent of internet, online shopping is current being offered at these stores. The main point of sale however still remains the H&M store.
H&M retail have stores conveniently located in the most prestigious cities in the UK as well as other parts of the world. These stores are able to generate huge profits for the company. The convenience of the store is imperative as this enables the retailers capture customers within a given locality (H&M Company, 2013).
Similarly, top shop has well designed stores that are used to attract the customers. The stores are mounted at strategic points so as to enhance the distribution network. These stores are used as Point of Sale (POS) for the company and hence they are usually well arranged.
Top shop uses these stores as convenience stores enabling customers living in the different regions of UK to shop for the different designs.
This is imperative as the retail theory documents that there is need for companies to move their products and services near the consumer who is the principle source of income for the company.
Like H&M, Top shop also uses internet for online sales. The company has a site “www.topshop.co.uk” where customers can view their current fashion trends, make orders and pay for them online.
The use of internet is important as the company can be able to reach millions of customers and the purchasing process is made easier enabling the company gain higher sales volume and profits.
Store Design
The company store designs are elegant and appealing so as to attract the customers. The most imperative aspects taken into consideration during the store design are the store and the display windows.
For H&M, these details are done at the headquarters. H&M continuously varies the interior designs of their stores as well as the display windows so as to make them more appealing and to reflect to the current modern trends.
The display window which are also refereed to as the dressing windows are well designed so as to attract customers. The stores have large dressing windows in the front façade and these are designed so as to attract customers. The dressing window serves the purpose of attracting the customers.
The displays in the dressing windows are altered after every 10-14 days so as to inform and attract customers to the stores (Lawrence, 1994).
Most of the dresses in the display window are the latest collection and are meant to inspire the client to purchase the dresses. The display widows and the store layout are carefully designed so as create an environment of association and to enable the customer to focus on the dresses.
This is important in motivating the customers to make the choice of buying the dresses. In the stores, clothes are well arranged and subdivided in simple manner.
This enables the customers to differentiate the different products as well as make comparisons and this enables them make the appropriate choice based on price and quality of the clothing. The arrangements of the stores also enable the customers to get what they are looking for easily.
The clothing display and arrangement is used to depict a certain theme (H&M Company, 2013). Days such as father’s days, Valentine ’s Day and other special occasions are important and the clothing display is usually done so as to depict the themes represented by these days.
The arrangement of the store and the dressing windows is done so as to present H&M as being a trendy company offering affordable prices. In some areas the stores designs represent high end products as well as the cutting edge products.
The design aspects on top shop are also done in an eloquent manner. The design of the store usually represents certain themes that guide the customers into purchasing the products offered by the company.
Advertising and Promotions
In retailing, advertisement and sales promotions are widely used so as to attract the customers and also convince them to buy a particular product.
Top shop advertising methods
Top shop uses several sales and promotion methods. These promotion activities are mainly scheduled depending on the seasonal nature of the fashion industry. Using this strategy, the company has end of season sales, mid-season sales among other sales promotion methods.
Top shop also uses the internet as an effective marketing tool. Through the company website, the company is able to display some of the major cloth line that is available at their stores (Top Shop Company, 2013). Customers visiting this website are able chose the products that they want to buy and they can also pay online.
Another promotional strategy that is used by top shop is the in-store promotion. This enables the consumer and the company to interact at this POS.
Previously, the company had used strategies such as “My wish list” where customers were asked to indicate their preferred merchandise from top shop. Through this promotion, the customers listed clothing they would prefer for their friends and relatives.
To evaluate the customer’s perceptions, Top shop continually evaluates the feedback they get from customers. This feedback information is used to improve the operations of the company as they are able to respond to pertinent issues raised by the customer.
Another advertising method adopted by both top shop and H&M is visual merchandising. Is this strategy, the stores are carefully designed and arranged so as to attract the customers walking on the streets.
For effective visual merchandising, it is important that products that are displayed at the display window be of high quality, elegance and bear good advertisements jargons so as to lure the customers into the store. Both H&M and Top shop use sophisticated methods in their display windows as well as the shop arrangement.
These strategies entice the customers to make a stopover at the store and these results to increased sale (H&M Company, 2013).
Top shop also uses style notes. The notes are signed by the user and the stores receive them. This creates personal contact between the store and the consumers and this enables the marketing and braiding of the fashion product.
In retailing it is imperative that a company creates brands. A brand can be regarded as a name which the customers associate with a given product. In the retailing industry, it is imperative that companies struggle to create brands name that customers can identify with.
This would results to customers buying from the store due to the already established names. Due to the personal contact that exists between the stores and the consumer, it is easy to develop brands as the customers are attracted to the products on sale.
H&M advertising strategies
H&M uses a number of advertising and sales promotions methods. As aforementioned, it is imperative that the company uses good advertising strategies for them to gain more customers and competitive edge (David, 1998).
The main method used by H&M in advertisement is the mobile phone based advertising strategy. Using this method, the company uses the social media which is easily linked to the mobile phone to advertise their store and their products. Using this strategy, the company effectively links the customer to the store.
Mobile marketing campaign is the company main method of advertising. Using this method, the customers receive SMS coupons and SMS banners in their mobile applications as they use the social media.
H&M has also teamed up with Adiento which is a company that assist in the marketing of the company’s products. To gain more customers, the company encourages members to join the H&M club by visiting their website and leaving their mobile number (Butcher, 2009).
Other the years, it has been found out that celebrities all other the world influence the dressing and behaviours of people. It would be therefore prudent to use superstars to advertise the latest trends in the fashion world. To do this, H&M uses a number of celebrities who assist in the marketing.
These include Lagerfeld and, Roberto Cavali. The company also campaigns against Aids in the sales promotion of t-shirts with the label “designers against aids”.
Most of the advertising methods used by H&M are centrally developed at headquarter of the company. Most of these advertisements have a central theme, which is “fashion and quality”.
Most of the advertisement messages from H&M don’t focus on the range of products they have, rather, they focus on the styles and attitudes that the company wants the consumer to have.
Price is one of the most important factors in the marketing mix. For H&M, the price of a product plays a significant role and should therefore be reduced so as to attract customers. Most of the advertisement portrays H&M as a convenient clothing store where one can get a decent dress at an affordable price.
This makes it possible for the ordinary customers to walk into their stores in hope of getting a good outfit at a reasonable price. In the long run, H&M strategy is to become a market leader in terms of pricing. In fact, H&M is able to mix affordability with trendy fashions (Nagle & Holden, 2001).
Brand creations and positioning is also another imperative strategy used by H&M (Schmidt & Ludlow, 2002). The company’s aggressive campaigns are aimed at enabling the customers recognize the uniqueness of their brand and differentiate their products as being of high quality and affordable price (Olins, 2001).
For children products, the main emphasis of the advertisement and sale promotions is not to reach the children but rather the parents who buy these products. The company has special guidelines on all children advertisement methods as well as the other advertisements.
Customer Segmentation
For a company to be effective, it is imperative that its market is well identified and the different variations in the market indentified. For retail outlet to be effective, it is essential that the market is segmented effectively (Wright, 2006).
There are a number of ways through which the market can be segmented. These include wealth, age, lifestyle, gender and nationality (Boyd and Walker, 1990).
H&M Company which has stores internationally uses a number of target market segmentation. The segmentation of the market is based on the gender and age. Based on age, the company has the following main classifications (Remaro, 2009).
Young children: these include children up to the age of 14 years. In this age bracket, the company specialises in the supply of affordable, comfortable and durable dressing. Not much is done to keep up with the fashion trends at this age.
Teenagers: this age bracket has a great demand for the trendy wear. Clothes that are currently in fashion must be provided for this age bracket.
Women segment: the clothes at the segment target women between the ages of 18 – 60 years. The clothes in this section target the working class women who have to look fashionable. Clothes in this age bracket address needs such as private evening wear, clothes to wear during leisure activities.
Most of the clothing products are sold to either men or women. H&M market can also be segmented in terms of the gender. Based on this classification, the company’s clothes can be divided into the women and male clothing. The two represent a diverse field with different requirements for each.
H&M Company also segments their products based on casual wear and sportswear. In this classification, there are clothes designated for work and other official wear and those dedicated for the sporting activities or to be worn during free times (Concepcion, 2008).
Another segmentation method is based on lifestyle. Based on this segmentation, people living in high class residential areas are charged more as compared to those living in middle and low class residential areas.
For H&M, this segmentation is usually not used as most of the commodities have a common price and the H&M main strategy is to ensure affordable and trendy fashions to all. The clothes are distributed from the central store to all the regions and hence the products and prices are nearly equal in all the stores.
Top shop market segmentation
Top-shop has a number of segmentations. Since the company specialises in the design and sale of women dresses, segmentation of the market in terms of gender is not possible. The company makes ladies wear and they create a wide variety of dresses that customers can choose from (Candice, 2010).
Top shop customers are segmented to cater for the needs of women at different ages. The store has wears for old women, teenagers and the young ladies. The company emphasis on customer loyalty making sure that those who purchase from their stores will always come to purchase there next time (Hawkins, Best, & Coney, 1992).
Top shop, unlike H&M, specializes in designing luxurious wear. This make the company be able to segment their market based on the income and lifestyle of the people. Most of their customers are drawn from the group of customers who enjoy clothing that can be differentiated from the others.
These customers are willing to spend more so as to buy attires which are deemed to be of high quality and are unique (Solomon, 1999).
Multichannel Platforms
A multichannel retails operation entails the use of different methods to link up sales and the ordering process. Using multichannel platforms, the customers can access facilities provided by the company via their mobile phones, internet and online stores.
Both top shop and H&M have online stores where customers can access the clothes. The online services provided by the companies enable the customer to locate a store near him/her. Online sales have been implemented by the two companies.
For H&M, Both catalogue and internet sales are only used to reinforce the store sales. The use of catalogues and online sale are used to make the products accessible to customers and this helps them to make the selection from devices such as the computer.
Most of the clothing products are availed in online shopping and this enables customer who are not able to visit the store select the appropriate clothing.
Catalogues sales are done through mailing the customer with H&M mail order and the customers can choose from the order and send it either online or through the post (H&M, 2000).
The use of online stores enables customers to conveniently search for clothes and also buy them without the need to visit most of the stores.
Problems Eexperienced
The retail market has a number of problems that affect the distribution of products. Some of the main problems experienced by the two companies include:
Intense competition
One of the principle problem experienced by both H&M and top shop is the intense completion by other companies dealing with the same products. The company must adopt strategies to differentiate their products, create a brand and ensure that the gain competitive advantages (Michael & Lewis, 2010).
Product uniformity
Most of the products supplied by H&M are uniform throughout. This means that the clothes being sold in the UK and the same clothing is sold in another country.
This has a potential problem due to variations in the fashion industry based on regions. Customers in the USA may opt for a different design as compared to those in the UK. The company must formulate strategies to deal with such variations
Branding and customer loyalty
Due to the increased competition, branding and product differentiation has become very hard. H&M strategies emphasize on the need for high quality and affordable clothing while top shop advocates for luxurious clothing (Schultz, Antorini & Csaba, 2005).
For the companies to effectively gain competitive advantage, it is necessary that product differentiations methods be improved (Lynn, 1995; Wilson & Gilligan, 1992)
Strategies That the Retailers Can Adopt
Distribution of goods to customers
Both companies have adopted online sales methods. They should be able to deliver the clothes to customers who buy products online. This will enhance the sale process.
Optimisation of the distribution market
In order to reach to the potential market, both companies must continue expanding and opening new stores. Customers need to shop at their own convince and locating these stores near the consumer will enable them sell more clothing.
Currently, H&M buys their products directly from suppliers and buying in bulk results to price reduction due to economies of scale.
Reducing the number of middlemen reduces the final product price and this is beneficial in achieving price leadership. Top shop should also use the same strategies so as to reduce the price of the clothing products they sell (Peter & Klaus, 1999).
Diversifications
Top shop should diversify their clothing line to include male and young children. H&M should also expand their product line so as to include clothes for the elderly people as well as those who are conservative.
Market segmentation based on income and lifestyle
H&M store prices should be adjusted based on the income of the residence where the store is located. In high class residential areas, highly priced products are considered more fashionable and the company can make more profits (Barry & Evans, 2009).
Regional variability
Most of the retail clothing companies such as H&M supply unique products to all their stores. This is not a good as different clients from differing nationality have varying tastes and preferences.
The company should engage in determining taste of different consumers and manufacture clothing based on these tastes. Products for different shops should be unique.
Advertisements
H&M advertisement strategy should be improved. Currently, the company uses mobile phones and social media to market their products.
The advertisement and sales promotion budget should be increased and other advertisement strategies such as the use of print media, advertisement through fashion magazines as well as the use of television network should be adopted (Kotler, 2003).
Working with global designers
Currently, the companies have their own designers and it is prudent that these companies collaborate with other designers so as to develop trendy and unique clothes that will satisfy the consumer wants.
References
Barry, B. & Evans, J. 2009, Retail Management: A Strategic Approach (11th Edition). London, Prentice Hall.
Boyd, H. & Walker, O. 1990, Marketing Management: A Strategic Approach, Irvine Inc., Boston.
Kotler, P. 2003, Marketing Management,11th Edition, Prentice Hall, New Jersey.
Kroll, B. 2004, Designer Dresses for Less, Time, vol. 164, 4, p. 71.
Kunz, G. 1998, Merchandising: Theory, Principles, and Practice, Fairchild Books.
Lawrence, J. 1994, Store Planning/Design: History, Theory, Process, New York, Wiley.
Levy, M. & Weitz, B. 2008, Retailing Management 7th edition, New York, McGraw-Hill/Irwin.
Lynn, B. 1995, Building Brand Identity: A Strategy for Success in a Hostile Marketplace. New York, Wiley publishers.
Lusch, R., Dunne, P., & Carver, J. 2011, Introduction to Retailing (7th Edition), South Western, Cengage Learning. Web.
Michael, D. & Lewis, R. 2010, The New Rules of Retail: Competing in the World’s Toughest Marketplace, Basingstoke Hampshire, Palgrave Macmillan.
Nagle, T. & Holden, R. 2001, The Strategy and Tactics of Pricing: A Guide to Profitable Decision Making (3rd Edition), prentice Hall publishers, London.
Olins, W. 2001, How Brands are Taking over the Corporation. Oxford, Oxford University Press.
Peter, J. & Klaus G. 1999, Customer behaviour and Marketing strategy: European edition, United Kingdom, McGraw-Hill.
Remaro 2009, H&M Clothing. Web.
Schmidt, K. & Ludlow, C. 2002, Inclusive Branding: The Why and How of a Holistic Approach to Brands. Basingstoke: Palgrave Macmillan.
Solomon R. 1999, Customer Behaviour: international edition: fourth edition, New York, Prentice Hall International, Inc.
Schultz, M., Antorini, Y. M., & Csaba, M. 2005, Corporate branding: Purpose, people, process. Copenhagen, Copenhagen Business School Press.
Consumers are driving change in the retail and consumer goods sector with demands for transparency of environmental impact and the re-emergence of e-retailing. Private equity is the catalyst for change in the sector, the result has been an industry revolution as many investors seek to introduce global best practice and address supply chain and operational issues at a very fast rate.
In 2007, PricewaterhouseCoopers retail and consumer outlook, released today, examines current issues facing the retail and consumer goods sector and sheds light on the drivers of and reasons of these changes.(Pricewaterhouse Coopers, 2007)
E-retailing
E-retailing involves purchasing or shopping on-line. It is re-emerging in Australia. Although it is in its infancy, more consumers are becoming comfortable with online shopping and are seeking out retailers who can satisfy their needs to purchase online. As e-retail returns, retailers need to learn how to hunt, capture and keep their customers and evolve as their acceptance of the internet as a shopping domain increases. They need to provide the services their customers demand, or loose them altogether. Marks and Spencer, a popular retail brand in the UK, indicates it is perhaps struggling in this area.
Many e-retailers have focused on significant marketing efforts to attract customers in order to execute transactions, but have not focused on the less glamorous, but equally important, aspect of keeping the customers, by facilitating flawless delivery. Not only is it important to follow through and make sure delivery is facilitated, but companies can use the web to enhance delivery via customer service by allowing customers to track the status of the transaction. (Private equity, 2007)
Pros and cons of e-retailing
E-retailing can be considered another form of non store retailing. Its closest cousin in terms of other forms of non store retailing is catalogue retailing. Catalog retailing accounts for about 10% of all retail transactions. It is therefore instructive to compare e-retailing to catalogue retailing to gain some insight in to its potential impact. (Zeller, 2000)
Advantages of e-retailing
Customers have a much wider choice at their fingertips (many e-tail sites) thus the web creates a global bazaar style marketplace that brings together many consumers and many retailers. With web search capabilities (which need further development) it is easier to find the types of goods a customer is searching for, catalogs are received passively, at the behest of the retailer. Customers can execute transactions via the same medium the information is providing, so there is no disconnect between the desire to purchase and the ability to purchase. (Payment skills are schemes evolving and therefore this advantage is likely to become more apparent in the future).E-retailers can use price discrimination more efficiently than catalogue retailers, which may use coupons to lower fixed prices.
They can use previous transactions to identify the likelihood of products been purchased at certain price points-retailers can change the product placement (user display), based on previous transactions. To increase the visibility of goods that the user is more likely to purchase based on there close relationship with previous purchase. This placement can be designed based on the context of the previous purchase. (Zeller, 2000)
Disadvantages of e-retailing
Not all customers have access to the web, as they do to the postal system. This is a temporary issue as the evolution of the web continues. Ease of use is a problem, as the web design is still complex or at least some how chaotic-retailers stores are not standardized in design in the way catalogs and retails stores have become. Therefore different user behaviours (navigation schemes) need to learn for each e-retail store. This is a temporary issue as the evolution of the web continous. Trust, security and privacy concerns prevail. Consumers are concerned with the use of the data they provide during transactions. Graphic presentation is not as compelling for the web as it can be for catalogs. This is temporary issue as the evolution of the web continuous. (Zeller, 2000)
The customer- Focused Business Model
Zeller stressed that the development of a strict customer focused business model is critical for the e-retailer in attaining success. A traditional economics business model is characterized by maximizing shareholder wealth and individuals being motivated by economic goals. The consumer is not an integral part of the model. A customer focused business model recognizes the consumer as the central component. Working relationships across company departments in order to identify what the consumer wants is imperative. (Zeller, 2000)
Conclusion
In this article, we are introduced to the unique nature of the e-retail industry. We have examined the disadvantages and advantages faced by the industry and identified specific activities that pertain to e-retailing
Reference
Private equity, (2007). E-retailing: Driving change for retail and consumer goods sector.
Pricewaterhouse Coopers, (2007). Retail and consumer outlook.
Zeller, T (2000): Measuring and Managing e-retailing with activity-based costing. Journal of cost management.